Connecticut Public Act 11-223, signed by Connecticut Governor Daniel Malloy on July 13, 2011, prohibits certain employers from using the credit history of a prospective or current employee in making hiring or employment decisions. Under the new law, employers may not “require an employee or prospective employee to consent to a request for a credit report that contains information about the employee’s or prospective employee’s credit score, credit account balances, payment history, savings or checking account balances, or savings or checking account numbers as a condition of employment.” There are certain exceptions to the new legislation. The prohibition does not apply if the employer is a financial institution, if such a report is required by law, or if the employer reasonably believes that the employee committed a violation of law related to the employee’s job. Additionally, employers may require consent when a credit report is substantially related to the employee’s current or potential job or the employer has a bona fide purpose for requesting or using information in the credit report that is substantially job-related and is disclosed in writing to the employee or applicant in writing. Connecticut is the sixth state to enact a law restricting employers’ use of credit history, following Hawaii, Illinois, Oregon, Washington, and Maryland. Similar legislation is being considered at the federal level, and several states have similar bills pending, including California, New York, Pennsylvania, Georgia, and Florida.
TIP: Employers in Connecticut should prepare to comply with this new legislation, which goes into effect on October 1, 2011.